The number of families having their incomes cut by the government's benefit cap doubled in just three months during the first wave of coronavirus, official statistics show.
As of May 2020 150,000 households had their social security payments capped by the policy, a 93 per cent increase from the previous quarter.
There was also a 500 per cent increase in new households being hit by the cap for the first time – suggesting many people are feeling its sting for the first time.
The policy leaves families unable to pay their rent, with 2018 research showing two thirds covered for six months or more go into arrears with their landlords. It also disproportionately affects ill and disabled people.
The government claims the benefit cap is an incentive to work, but unemployment is set to rocket in the aftermath of the pandemic as businesses shutter or scale back staffing to cope with lockdown, social distancing regulations, and economic recession.
Chancellor Rishi Sunak has now begun to unwind his furlough scheme and transfer costs of supporting laid-off workers onto employers, with the new state support set to disappear entirely in the autumn.
Jon Sparkes, chief executive at homelessness charity Crisis, said the cap needed to be immediately suspended to prevent a wave of homelessness.
“With each passing day comes new job losses as the impact of the pandemic is felt. These figures show thousands of people are turning to the benefits system to break their fall, only to discover that the benefit cap is cutting them off from vital support," he warned.
“Despite ongoing assurances that the benefit cap grace period would protect people newly claiming, we know that people on low incomes aren’t getting this support, which is leaving many worrying about how they are going to pay their rent or put food on the table for their children.
“If we are to avoid a wave of people from losing their homes through no fault of their own, it’s vital that the government immediately suspends the benefit cap so that people have the means to stay afloat. Otherwise we risk all the good work to protect people being undone.”
Layla Moran, a Liberal Democrat MP standing for the party's leadership, said: "These figures should act as a wake-up call to the government. Their stubborn refusal to review the cruel cap on benefits is pushing thousands of children into poverty.
"At the outset of the crisis, the chancellor said we will be judged by our capacity for compassion. Ministers are failing abysmally at that test.
"We need to seize this moment to fix the broken welfare system and introduce a Universal Basic Income so no-one is left behind."